What Changed in Chicago Real Estate Law From 2024 to 2026

The mansion tax that did not happen

The most-watched proposal of the period, the Bring Chicago Home referendum, would have replaced Chicago's flat real estate transfer tax with a graduated structure: a small cut on sales under $1 million, and higher rates on sales above $1 million and $1.5 million, with the money dedicated to homelessness. It went to voters in the March 2024 primary and failed, with roughly 52 percent voting no. It survived several court challenges but lost at the ballot box.

The practical result: there is no graduated transfer tax in Chicago. The flat rate still applies, which you can estimate with our Chicago transfer tax calculator. The mayor has signaled interest in bringing the question back someday, but as of this writing that is intent, not law.

The big one: Illinois tax-sale reform

For owners who fall behind on property taxes, 2026 brought the most consequential changes, and there are two separate laws that are easy to confuse.

First, a timing measure: a 2026 law (House Bill 598, which the Cook County Treasurer describes as Public Act 104-0460) postponed the Cook County annual tax sale from March to December 1, 2026, and paused interest from accruing on the delinquent debt while lawmakers finished a larger overhaul.

Second, the structural reform: House Bill 4537 passed the Illinois General Assembly on May 31, 2026. It is designed to bring Illinois into line with the U.S. Supreme Court's Tyler v. Hennepin decision, which requires returning a homeowner's surplus equity above the tax debt. The bill creates a tax-deed auction in which the highest bidder pays the taxes and fees and the surplus equity is returned to the former owner, plus a fund for owners who already lost equity in recent sales. A transition period keeps a limited number of annual sales for a few more years. We cover the practical side in our tax-delinquent seller guidance.

Coach houses are back, citywide

After decades of prohibition and a small 2021 pilot, Chicago passed a citywide expansion of its Additional Dwelling Unit ordinance in September 2025, and the program launched on April 1, 2026. Coach houses and basement or attic conversions are now allowed by right across multi-unit and many commercial districts, while single-family districts come online ward by ward as local alderpersons opt in. For owners, an ADU can be a way to add a rental unit or family space, subject to the rules in your ward.

Renters got new paperwork rights

Illinois still bans local rent control under a 1997 state law, so neither Chicago nor any other municipality can cap rents. What did change is tenant paperwork and process. Beginning January 1, 2026, a Summary of Rights for Safer Homes must be the first page of every written residential lease, minors can no longer be named as defendants in eviction cases, landlords cannot force electronic-only rent payment, and written receipts are required. Owners and small landlords should make sure their leases and processes reflect these updates.

The City Council started saying yes again

On the development side, a long-running procedural fight stalled the City Council's zoning committee for much of 2025 before breaking in spring 2026, after which dozens of stalled projects advanced. One closely watched approval came earlier: the Fern Hill Old Town Canvas plan near 1600 North LaSalle cleared the Council in April 2025 after a compromise that cut the unit count from 500 to 349, lowered the height, and guaranteed 20 percent affordable units. The pattern, smaller and more negotiated, echoes what we are seeing across the city.

Why this matters if you own or sell

If you are behind on taxes, the tax-sale reforms are the headline; they change the timeline and, going forward, protect surplus equity, but the details and effective dates are still settling, so get current facts before you rely on them. If you own a building, the ADU expansion is a new value-add option. And if you are selling, the failed transfer tax means closing-cost math did not change at the high end. When you are weighing a move, our calculators and a direct offer review can put real numbers on it.